This article originally appeared in Mike Koehler’s blog FCPA Professor and is reprinted with his permission.
Recently Chuck Duross (Deputy Chief of the DOJ’s Criminal Division, Fraud Section) spoke to the Amercian Bar Association’s Annual National Institute on White Collar Crime. Unfortunately, his remarks were not released (see this prior post regarding the “Luncheon Law” nature of the FCPA). Thankfully though, Caryn Lara Trombino (Perkins Coie), authored this Update regarding certain of Duross’s remarks.
The Update states as follows.
“The Resource Guide was released on November 14, 2012, following what Duross described as a year ‘dominated’ by the writing of the Guide.”
Even though the Guidance is a meaty document, introductory material, blank pages, and a table of contents account for 35 pages; the FCPA statue itself and footnotes account for 30 pages; and a summary of previously issued guidelines (such as DOJ’s Principles of Federal Prosecution of Business Organizations, the U.S. Sentencing Guidelines, DOJ’s FCPA Opinion Procedure program), or other substantive laws such as the Dodd-Frank Wall Street Reform and Consumer Protection Act whistleblower provisions account for 20 pages.
The portions of the Guidance that can accurately be described as guidance represent little new information to those previously knowledgeable about the FCPA and its enforcement. Indeed, in a press conference introducing the Guidance (see here for the prior post), then Assistant Attorney General Breuer said that the Guidance ‘‘does not represent a change in policy.’’
Against this backdrop, it is surprising to hear that 2012 was a year “dominated” by writing the Guidance.
The Perkins Coie Update also states as follows.
“[Duross] explained that the primary impetus for creating the Guide was the United States’ treaty obligations under the Organisation for Economic Co-Operation and Development (OECD) Convention.”
As I explain in my article, ”Grading the Foreign Corrupt Practices Act,” the Government’s explanation for its motivation in issuing the Guidance(Duross was not the first to make the above comment, a similar point is made in the Guidance itself) does not appear to be genuine.
Here is why.
In 1988, Congress, as part of the FCPA’s 1988 amendments, encouraged the DOJ to issue FCPA guidance. For instance, a relevant House report stated as follows.
‘‘In order to enhance compliance with the provisions of the FCPA [the FCPA amendment] establishes a procedure for the [DOJ] to issue guidance describing examples of activities that would or would not conform with the [DOJ’s] present enforcement policy regarding FCPA violations.’’
In 2002, the OECD in its Phase 2 report of U.S. enforcement efforts of the OECD Anti-Bribery Convention, encouraged the U.S. to issue such guidance. In pertinent part, the OECD report stated:
“Despite the abundance of articles and commentaries on [the FCPA], there is only limited amount of authoritative or official guidance available on compliance with the twenty five-year old statute. . . . Much of the authority or guidance regarding the Act comes from speeches from DOJ and SEC officials, DOJ opinions, DOJ and SEC complaints, settlements that have been filed, and informal discussions of issues between companies’ counsel and the DOJ or the SEC. . . . The status of these various sources of information is however not always clear: there could be merit in regrouping and consolidating them in a single guidance document.”
In 2010, the OECD again, this time in its October 2010 Phase 3 Report on the United States, stated as follows.
‘‘The evaluators recommend that the United States consider consolidating and summarizing [all relevant sources of FCPA information] to ensure easy accessibility, especially for [companies] which face limited resources.”
The information that follows is most pertinent in assessing the government’s motivation in issuing the FCPA Guidance in November 2012.
In the November 30, 2010 Senate FCPA hearing (approximately 1.5 months after the OECD Phase 3 Report), Senator Amy Klobuchar (D-Minn.) asked the DOJ the following post-hearing written question.
‘‘Do you believe companies could comply with more certainty with the FCPA if they were provided with more generally applicable guidance from the Department in regards to situations covered by the FCPA that are not clear cut or fall into gray areas?’’
DOJ’s response post-hearing response (approximately two months after the OECD Phase 3 Report) was that it ”believes [the DOJ] provides clear guidance with respect to FCPA enforcement through a variety of means,’’ and the DOJ then listed the same general categories of information the OECD identified in 2002 as being deficient.
For a more likely government motivation for release of the FCPA Guidance in November 2012 (and indeed former Assistant Attorney General Lanny Breuer’s announcement in November 2011 that guidance would be forthcoming in 2012), please read my article “Grading the Foreign Corrupt Practices Act Guidance” specifically the section titled “The Timing of the Guidance.”